AkzoNobel publishes Q2 2010 results

July 23, 2010

AkzoNobel Q2 2010 report cover
 
  • Revenue up 13 percent to €3.9 billion (5 percent in constant currencies)
  • EBITDA €614 million (2009: €506 million), up 21 percent
  • EBITDA margin 15.7 percent (2009: 14.7 percent)
  • 2011 EBITDA margin target of 14 percent already achieved
  • Sale of National Starch to complete in H2
  • Cautiously optimistic in spite of continuing economic uncertainty

Akzo Nobel N.V. (AkzoNobel) today announced a revenue increase of 13 percent (5 percent positive currency translation effect) for the second quarter of 2010 and the early achievement of the 14 percent EBITDA margin target set for the end of  2011.

Q2 2010 table

Strong revenue gains were achieved in the higher growth markets in all business areas. Revenue improved 8 percent at Decorative Paints due primarily to its strong footprint in these markets, where the business is growing faster than the market, offset by lower or negative revenue development in mature markets. Both Performance Coatings and Specialty Chemicals booked double-digit revenue growth (19 percent and 14 percent respectively), mainly driven by higher volumes.

EBITDA for the second quarter was €614 million, 21 percent higher than in 2009, with total net income up 76 percent to €273 million.

During the quarter AkzoNobel announced the US$1.3bn sale of National Starch, completing the divestments of non-core former ICI businesses, a US$3 billion revenue target for China by 2015, and the completion of the acquisition of the powder coatings activities of the Dow Chemical Company.

While Q2 was clearly a good quarter, AkzoNobel remains vigilant about the pace and sustainable nature of the economic recovery. Nevertheless, the company is cautiously optimistic about the prospects for the remainder of the year.

CEO Hans Wijers

“Our Q2 results show a further increase of revenue and profitability across each of AkzoNobel’s business areas, evidencing that we are benefiting from the recovery and our on-going restructuring. Our focus on customers, cost reduction and cash generation, while increasing our exposure to our higher growth markets, which currently represent close to 40 percent of revenue, has been highly beneficial. AkzoNobel is emerging from the global economic crisis in better shape underlined by the early achievement of our 2011 EBITDA margin target of 14 percent.

“With the ICI integration complete and a number of important targets having been achieved, we can concentrate fully on accelerating our growth agenda and building our presence in key strategic markets.

”The importance of these markets, which will continue to have a major influence on our global activities and strategic agenda, was highlighted by our Q2 performance, particularly at Decorative Paints, where revenue increased 38 percent in Asia compared with 2009 as we invest in brands and distribution. In addition, it was another strong quarter for our Performance Coatings business, with Asia again featuring prominently. The 15 percent volume increase at Specialty Chemicals also owed much to these higher growth regions.

”The developed markets remain challenging. Raw material price pressure and shortages are expected to continue into the third quarter. We will keep a careful eye on the trading environment and costs will continue to be managed aggressively. Our balance sheet remains strong and we have no immediate refinancing requirements. We will provide an update regarding the company’s future ambitions at a capital markets day scheduled to take place in London on September 28.

Business Area Highlights

Decorative Paints
Q2 2010Q2 2009^%H1 2010H1 2009^%
1,4011,2928Revenue2,4572,2808
20517120EBITDA28721931
14.613.2EBITDA margin (%)11.79.6

 

Performance Coatings
Q2 2010Q2 2009^%H1 2010H1 2009^%
1,2601,06119Revenue2,3092,04713 
19116615EBITDA33427123 
15.215.6EBITDA margin (%)14.513.2

 

Specialty Chemicals
Q2 2010Q2 2009^%H1 2010H1 2009^%
1,2581,10314 Revenue2,4122,19510
25720128EBITDA46435232
20.418.2EBITDA margin (%)19.216.0